Wireless USB startup WiQuest folds

SAN JOSE, Calif.  WiQuest Communications Inc. officially closed its doors today, the first of perhaps several casualties to fall among ultrawideband chip designers. The Allen, Texas, company employed about 120 people focused on the wireless USB protocol.

At least a dozen mainly venture-backed companies have been pursuing UWB for uses such as wireless USB links on consumer and computer gear. One analyst predicted a shakeout in UWB chip makers earlier this year based on slow adoption of the technology that has been plagued by cost, performance, power consumption and regulatory issues.

"We've been looking for a variety of alternatives for awhile now including new investors and acquisitions, but none looked like positive alternatives to our investors so we decided to shut the doors today," said Todd A. Brown, vice president of worldwide sales at the company.

"I think this is a black eye for UWB in the short term, but it opens up more opportunities for the remaining players," said Brian O'Rourke, principal analyst at InStat (Scottsdale, Ariz.).

"WiQuest was certainly the leader in first-generation UWB silicon shipments. However, it seemed to have difficulty moving to a one-chip solution that was capable of delivering the upper-band support necessary for worldwide acceptance, he added.

WiQuest was shipping a two-chip wireless USB solution adopted as an optional add-on to notebooks from Dell, Lenovo and Toshiba as well as consumer devices such as hubs from Belkin, D-Link and others. It was sampling a single chip device announced in August.

"The thing that's really painful about this is we were confident we were number one in the space," said Brown. "But we were at about a one-percent attach rate in notebooks and needed to be at 5-10 percent and growing," he added.

OEMs want to pay less than $5 for UWB chips, an expectation set by today's Bluetooth and Wi-Fi silicon, Brown said. Analysts predicted second-generation chips coming to market in 2009 may be able to hit such price points, but not today's parts.

In addition, system makers want power consumption of less than 300 milliWatts, especially for handsets, Brown said. Chips are consuming close to a Watt today, he added.

First generation wireless USB chips were criticized for delivering less than 50 Mbits/s performance, in part due to non-native implementations and overhead of the USB protocol. On the regulatory front, UWB is still not approved for use in all geographies, and some areas use different spectrum bands for UWB.

Brown predicted other UWB startups may soon find themselves in a similar position. "If you don't have two years of funding, it will be difficult to survive," he said.

In September, Focus Enhancements Inc., a supplier of UWB and other wireless chip sets filed for bankruptcy.

Less than 100,000 UWB-enabled devices shipped in 2007, according to InStat.